Verio Shoots for Unified Approach to App Hosting

Verio, an erstwhile hosting provider, has introduced a new offering that places it solidly in the Software as a Service camp.

The company has introduced Verio Business Solutions, which provides small and medium-sized businesses (SMBs) such hosted applications as Microsoft (Nasdaq: MSFT) Exchange 2007, SugarCRM, McAfee Total Protection for Small Business and PC Data Backup.

These applications are being offered on a standalone basis -- that is, they are not part of an integrated suite. However, next year Verio plans to move in this direction, company Chief Operating Officer Dennis Boyle told CRM Buyer.

"We could bundle a few of the products together or offer some sort of integration between the applications," such as an integrated SugarCRM, Microsoft Exchange package, he said.

New Trend

Verio's new offering -- not to mention its plans for future integration -- put the company at the forefront of an emerging trend in the hosting industry, said Philbert Shih, research analyst with Tier1 Research.

"It is quite rare for hosting providers to have a unified approach, offering not only hosting services but also applications," Shih said.

Typically these firms have sold Web space and supporting services for a company's Web presence, he explained.

"Now some of them are starting to make the jump into hosting applications. Verio is getting on that train," and with the wide array of applications it has introduced, it is on the front end, he said. "The hosting sector is in the middle of a significant transformation period. These companies need to make some kind of transition to offer more value add to customers."

End users are lobbying for this change as well, Shih added. "It means they have to work with fewer service providers."

Amorphous Shape

Until a firm business model emerges, though, the shape of this new trend within the hosting space will remain somewhat amorphous. Consider Verio: The company is acting as a reseller for some of the applications; for others it has already brought them in-house and hosted them directly.

It is also mixing and matching the type of functionality it thinks its SMB constituency wants. In this year's fourth quarter, it will be hosting Microsoft Sharepoint. Accrisoft's productivity product line, by contrast, is an unknown entity for many firms -- at least compared to the Exchange Server and Sharepoint duopoly. However, Accirsoft has been a reseller for Verio and the companies have formed a tight bond, Boyle said.

"Not only are we looking to bring brand name apps to market, but we also want to partner with firms that can help us create an ecosystem of solutions that provide a good fit for our customers."